Wind Industry Makes Annual Tax Credit Plea

The US wind industry went to Capitol Hill on Oct. 2 before a House committee to make what has become an annual ritual to extend a tax credit.

The House Oversight and Government Reform Subcommittee on Energy Policy held a hearing on the production tax credit, which is set to lapse on December 31. The production tax credit allows project owners to reduce their tax liability by 2.3 cents for every kilowatt-hour of electricity produced over a 10-year period.

The hearing centered on the recurring themes that have been debated for at least a decade. A new energy industry with supporting manufacturing infrastructure has been created. But opponents say the industry has been propped up long enough and should compete on its own.

“Over the years the PTC has been a tremendous success. With the credit in place, the US wind industry was the number one source of new generation capacity last year. Wind turbines are now generally made domestically by approximately 550 manufacturing facilities in all regions of the country,” Senior Vice President of Public Policy Rob Gramlich of the American Wind Energy Association testified.

A counter view was offered by Robert J. Michaels, a senior fellow of the Institute for Energy Research.

“My broad conclusion is that the PTC has far outlived any limited usefulness that it may once have had in stimulating wind power development, and that it should be permanently terminated as soon as possible,” he said.

The production tax credit expires at the end of this year following a one-year extension that was enacted by Congress last January. The credit was first passed in 1992 and has lapsed four times. A wind energy project must have started construction by the end of December to qualify, if Congress does not extend it.

President Obama has asked Congress to permanently extend the tax credit.